NasdaqGS:KALU

Stock Analysis Report

NOT FOR DISTRIBUTION
Header cover image

Executive Summary

Kaiser Aluminum Corporation manufactures and sells semi-fabricated specialty aluminum mill products.


Snowflake Analysis

Established dividend payer with adequate balance sheet.


Similar Companies

Share Price & News

How has Kaiser Aluminum's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: KALU has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0.8%

KALU

2.9%

US Metals and Mining

1.5%

US Market


1 Year Return

-27.5%

KALU

8.5%

US Metals and Mining

8.7%

US Market

Return vs Industry: KALU underperformed the US Metals and Mining industry which returned 7.3% over the past year.

Return vs Market: KALU underperformed the US Market which returned 6.9% over the past year.


Shareholder returns

KALUIndustryMarket
7 Day0.8%2.9%1.5%
30 Day-7.9%9.3%5.8%
90 Day-4.8%26.3%18.4%
1 Year-25.4%-27.5%11.1%8.5%11.1%8.7%
3 Year-20.4%-25.9%9.8%2.7%36.9%28.0%
5 Year-9.5%-19.0%64.7%50.6%66.8%48.7%

Price Volatility Vs. Market

How volatile is Kaiser Aluminum's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Kaiser Aluminum undervalued compared to its fair value and its price relative to the market?

17.48x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: KALU ($69.26) is trading above our estimate of fair value ($43.64)

Significantly Below Fair Value: KALU is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: KALU is poor value based on its PE Ratio (17.5x) compared to the US Metals and Mining industry average (8.7x).

PE vs Market: KALU is poor value based on its PE Ratio (17.5x) compared to the US market (16.4x).


Price to Earnings Growth Ratio

PEG Ratio: KALU is good value based on its PEG Ratio (0.6x)


Price to Book Ratio

PB vs Industry: KALU is overvalued based on its PB Ratio (1.5x) compared to the US Metals and Mining industry average (1.4x).


Next Steps

Future Growth

How is Kaiser Aluminum forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

31.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: KALU's forecast earnings growth (31.1% per year) is above the savings rate (2.2%).

Earnings vs Market: KALU's earnings (31.1% per year) are forecast to grow faster than the US market (22.4% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: KALU's revenue (1.4% per year) is forecast to grow slower than the US market (9.2% per year).

High Growth Revenue: KALU's revenue (1.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: KALU's Return on Equity is forecast to be low in 3 years time (11.7%).


Next Steps

Past Performance

How has Kaiser Aluminum performed over the past 5 years?

50.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: KALU has a large one-off loss of $42.1M impacting its March 31 2020 financial results.

Growing Profit Margin: KALU's current net profit margins (4.2%) are lower than last year (5.9%).


Past Earnings Growth Analysis

Earnings Trend: KALU has become profitable over the past 5 years, growing earnings by 50.5% per year.

Accelerating Growth: KALU's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: KALU had negative earnings growth (-32.9%) over the past year, making it difficult to compare to the Metals and Mining industry average (-11.3%).


Return on Equity

High ROE: KALU's Return on Equity (8.8%) is considered low.


Next Steps

Financial Health

How is Kaiser Aluminum's financial position?


Financial Position Analysis

Short Term Liabilities: KALU's short term assets ($806.4M) exceed its short term liabilities ($199.1M).

Long Term Liabilities: KALU's short term assets ($806.4M) exceed its long term liabilities ($632.9M).


Debt to Equity History and Analysis

Debt Level: KALU's debt to equity ratio (68.3%) is considered high.

Reducing Debt: KALU's debt to equity ratio has increased from 52.5% to 68.3% over the past 5 years.

Debt Coverage: KALU's debt is well covered by operating cash flow (53.1%).

Interest Coverage: KALU's interest payments on its debt are well covered by EBIT (6.1x coverage).


Balance Sheet


Next Steps

Dividend

What is Kaiser Aluminum current dividend yield, its reliability and sustainability?

3.87%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: KALU's dividend (3.87%) is higher than the bottom 25% of dividend payers in the US market (1.67%).

High Dividend: KALU's dividend (3.87%) is low compared to the top 25% of dividend payers in the US market (4.58%).


Stability and Growth of Payments

Stable Dividend: KALU's dividends per share have been stable in the past 10 years.

Growing Dividend: KALU's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (64.1%), KALU's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: KALU's dividends in 3 years are forecast to be covered by earnings (57.5% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

3.3yrs

Average management tenure


CEO

Jack Hockema (73yo)

18.75yrs

Tenure

US$5,248,430

Compensation

Mr. Jack A. Hockema has been the Chief Executive Officer of Kaiser Aluminum Corporation (Kaiser) since October 2001, and has been its Chairman since July 2006. Mr. Hockema served as the Chief Executive Off ...


CEO Compensation Analysis

Compensation vs Market: Jack's total compensation ($USD5.25M) is above average for companies of similar size in the US market ($USD3.18M).

Compensation vs Earnings: Jack's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Jack Hockema
Chairman & CEO18.75yrsUS$5.25m0.21% $2.3m
Keith Harvey
President & COO4.58yrsUS$3.12m0.20% $2.2m
Neal West
Senior VP & CFO1.42yrsUS$1.55m0.032% $348.2k
John Donnan
Executive Vice President of Legal8.08yrsUS$1.79m0.038% $417.2k
Raymond Parkinson
Senior Vice President of Advanced Engineering0.50yrUS$1.05m0.065% $704.8k
Jennifer Huey
VP & Chief Accounting Officer1.33yrsno data0.0031% $33.3k
Melinda Ellsworth
Vice President of Investor Relations & Corporate Communications5.08yrsno data0.049% $528.7k
Cherrie Tsai
VP, Corporate Secretary & Deputy General Counselno datano datano data
Courtney R. Lynn
VP & Treasurer1.92yrsno datano data

3.3yrs

Average Tenure

60.5yo

Average Age

Experienced Management: KALU's management team is considered experienced (3.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Jack Hockema
Chairman & CEO18.75yrsUS$5.25m0.21% $2.3m
Lauralee Martin
Independent Director9.83yrsUS$213.87k0.14% $1.5m
Donald Stebbins
Independent Director1.08yrsUS$179.17k0.030% $321.2k
L. Hassey
Independent Director5.83yrsUS$190.12k0.076% $827.9k
Alfred Osborne
Lead Independent Directorno dataUS$216.12k0.16% $1.8m
Carl Frankel
Director Emeritusno dataUS$8.25kno data
Brett Wilcox
Independent Director14yrsUS$206.37k0.096% $1.0m
Emily Liggett
Independent Director2.08yrsUS$189.12k0.027% $290.3k
Leo Gerard
Independent Director0.83yrUS$130.29k0.017% $183.7k
Thomas Van Leeuwen
Independent Director14yrsUS$211.12k0.10% $1.1m
David Foster
Independent Director11.08yrsUS$188.62k0.10% $1.1m
Teresa Sebastian
Independent Director1.08yrsUS$180.17k0.021% $223.5k

7.8yrs

Average Tenure

70.5yo

Average Age

Experienced Board: KALU's board of directors are considered experienced (7.8 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Kaiser Aluminum Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Kaiser Aluminum Corporation
  • Ticker: KALU
  • Exchange: NasdaqGS
  • Founded: 1946
  • Industry: Aluminum
  • Sector: Materials
  • Market Cap: US$1.088b
  • Shares outstanding: 15.71m
  • Website: https://www.kaiseraluminum.com

Number of Employees


Location

  • Kaiser Aluminum Corporation
  • 27422 Portola Parkway
  • Suite 200
  • Foothill Ranch
  • California
  • 92610-2831
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
KALUNasdaqGS (Nasdaq Global Select)YesNew Common StockUSUSDJun 2006
KLU1DB (Deutsche Boerse AG)YesNew Common StockDEEURJun 2006

Biography

Kaiser Aluminum Corporation manufactures and sells semi-fabricated specialty aluminum mill products. The company offers rolled, extruded, and drawn aluminum products used principally for aerospace and defense, automotive, consumer durables, electronics, electrical, and machinery and equipment applications. Its aerospace and high strength products include heat treat plates and sheets, hard alloy extruded shapes, cold finish rods and bars, seamless drawn tubes, and billets for aerospace and defense industries. The company’s automotive extrusions include extruded aluminum products for structural components, crash management systems, anti-lock braking systems, and drawn tubes for drive shafts, as well as offers fabrication services, including sawing and cutting to length. Its general engineering products comprise alloy plate, sheet, rod, bar, tube, wire, and standard extrusion shapes used in various applications, including the production of military vehicles, ordnances, semiconductor manufacturing cells, electronic devices, after-market motor sport parts, tooling plates, parts for machinery and equipment, bolts, screws, nails, and rivets. The company also offers extruded, drawn, and cast billet aluminum products for industrial end uses. It sells its products directly to customers through sales personnel located in the United States, Canada, Western Europe, and China, as well as through independent sales agents in other regions of Asia, Latin America, and the Middle East. Kaiser Aluminum Corporation was founded in 1946 and is based in Foothill Ranch, California. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/07/15 23:53
End of Day Share Price2020/07/15 00:00
Earnings2020/03/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.